2025-08-12 16:08

Miran has advocated for increased presidential control of Fed Board Miran to replace Fed Governor Adriana Kugler if confirmed Miran dismisses tariffs as cause of significant inflation Aug 12 (Reuters) - President Donald Trump's nominee to the Federal Reserve Board of Governors on Tuesday said the U.S. central bank's independence was 'of paramount importance' but declined to elaborate further, citing his coming approval process in the Senate. "I've always been clear that the independence of the Fed is of paramount importance," Stephen Miran, who is currently chair of the White House Council of Economic Advisers and who last year laid out a case for increasing presidential control of the Fed Board, told CNBC. "But...I do have the nomination going in front of the Senate and I really can't speak about that and get ahead of the Senate process." Sign up here. Miran has called for a complete overhaul of the Fed's governance, making the case in a paper he co-authored last year for the Manhattan Institute for increasing presidential control of the Fed Board, including by shortening members' terms. He also wants to end the "revolving door" between the executive branch and the Fed, and nationalize the Fed's 12 regional banks. If confirmed by the Senate, he would take over from former Fed Governor Adriana Kugler following her surprise resignation earlier this month, as she returns to her tenured professorship at Georgetown University. He would become one of seven members on a Fed Board now helmed by Jerome Powell, against whom Trump repeatedly rails over the central bank's refusal to lower interest rates as Trump demands. Two other governors were appointed by Trump during his first term and the other three are Biden appointees. But the vacancy Miran would fill extends only to January 31. Trump said Miran would hold the seat while he and his advisers search for a successor to Powell, whose term as Fed chair expires next May. Miran, asked to respond to inflation data released earlier on Tuesday, said the president's tariff policies are not resulting in meaningful inflation. The Consumer Price Index advanced 2.7% year-on-year in July but an underlying measure was up 3.1% at the fastest since January. "I do think that inflation has been well behaved, particularly since the president took office," he said. The majority of Fed officials had until recently been concerned that tariffs would exacerbate inflation and that worry has been the main driver in their decision not to lower rates. But a weak jobs report for July has changed that narrative, and rate futures markets now expect rate cuts to start next month. Asked if he believed he would be confirmed by the Senate in time for the next Fed meeting in mid-September, Miran said: "That's up to the Senate, and...I can't speak for them." https://www.reuters.com/business/miran-calls-fed-independence-paramount-declines-elaborate-cnbc-2025-08-12/

2025-08-12 15:55

Wall Street indexes advance after CPI print Short-term Treasury yields drop as tariff inflation fears ease, rate cut bets build UK gilts under pressure as wage data signals inflation pain Investors await Trump-Putin summit on Friday NEW YORK/LONDON, Aug 12 (Reuters) - World shares rallied on Tuesday as U.S. consumer prices data failed to shake market expectations of an impending Federal Reserve interest rate cut in September, even as a trade war truce between Washington and Beijing helped buoy sentiment. Wall Street's main indexes were all advancing after losing ground in the prior session, with financials, communication services, energy, industrials and materials driving gains. The Dow Jones Industrial Average (.DJI) , opens new tab rose 0.89%, the S&P 500 (.SPX) , opens new tab rose 0.56%, and the Nasdaq Composite (.IXIC) , opens new tab rose 0.60%. Sign up here. European stocks (.STOXX) , opens new tab nudged higher, rising 0.19%. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 0.56% to 943.41. U.S. Labor Department data showed that the consumer price index rose 2.7% in 12 months through to July, which was slightly below the 2.8% rate that economists polled by Reuters had forecast. "There was upside risk to inflation and the market was bracing for that in some respects," said James St. Aubin, chief investment officer at Ocean Park Asset Management in Santa Monica, California. "The report today, all things considered, was fairly benign. I don't think there was anything to write home about but it certainly took the worst-case scenario off the table." Asian equities had rallied overnight after U.S. President Donald Trump signed an executive order pausing triple-digit levies on Chinese imports for another 90 days. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab gained 0.19%. Markets on Tuesday traded on short-term relief, however, as the softer-than-expected consumer price data firmed up bets for U.S. rate cuts. Traders are pricing in a 92% chance of a Fed cut in September, according to the CME Fedwatch tool. Short-term U.S. Treasury bond prices rallied moderately, with the yield on two-year notes, which track interest rate expectations, down 1.1 bps at 3.743%. Longer-dated bond prices were lower. The yield on benchmark U.S. 10-year notes rose 3.5 basis points to 4.308%. Investors had been on tenterhooks about this batch of inflation data because it had followed a surprisingly weak jobs report on August 1, and had the potential to make concerns about U.S. stagflation a dominant global narrative. Trump has nominated White House adviser Stephen Miran to temporarily fill a vacant board seat at the U.S. central bank, stirring up speculation about presidential interference in monetary policy. The U.S. and China have engaged in a tit-for-tat tariff duel throughout the year, culminating in trade talks in Geneva, London and Stockholm since May that focused on bringing tariffs down from triple-digit levels. Chinese exports jumped 7.2% year-on-year in July, beating the consensus forecast of economists polled by Reuters, but the nation's factory gate prices dropped by the most in two years in a further sign of manufacturers struggling to sell goods at home. In currency markets, the dollar weakened 0.05% to 148.085 against the Japanese yen and was down 0.5% against the Swiss franc . The euro rose 0.43% against the dollar at $1.166550. The pound rose 0.5% against the dollar to $1.34990 as traders anticipated the Bank of England lagging behind other non-U.S. central banks in implementing rate cuts. The BoE cut benchmark borrowing costs by a quarter-point to 4% last week after a tightly balanced vote between members of its monetary policy committee, who also broadly agreed that the risks of an upward wages-and-prices spiral remained present. Ten-year gilt yields rose by 5 bps to 4.624%. In commodities, spot gold prices were flat at $3,344.60 per ounce after dropping nearly 1.6% on Monday in response to Trump announcing there would be no tariffs on imported gold bars. Brent crude oil traded down 0.14% to $66.55 a barrel ahead of the August 15 meeting between Trump and Russian President Vladimir Putin, aimed at negotiating an end to the war in Ukraine. U.S. crude fell 0.53% to $63.62 a barrel. https://www.reuters.com/world/china/global-markets-wrapup-5-2025-08-12/

2025-08-12 15:49

WASHINGTON, Aug 12 (Reuters) - U.S. President Donald Trump on Tuesday reiterated his call for the U.S. Federal Reserve to lower benchmark rates, and cited "a major lawsuit" against Fed Chair Jerome Powell over renovations of the central bank's buildings. "Jerome 'Too Late' Powell must NOW lower the rate," Trump wrote on his social media platform. "I am, though, considering allowing a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings." Sign up here. https://www.reuters.com/legal/government/trump-cites-major-lawsuit-against-feds-powell-again-urges-rate-cut-2025-08-12/

2025-08-12 15:18

RIO DE JANEIRO, Aug 12 (Reuters) - Brazil's consumer coffee prices fell 1.01% in July, the first drop in 18 months, according to data from the country's Broad National Consumer Price Index (IPCA) published on Tuesday. During the preceding year and a half, coffee was one of the main drivers of inflation in Brazil, the world's second largest coffee market, according to the Brazilian Institute of Geography and Statistics (IBGE). Sign up here. The retail price drop followed a decline in prices paid to farmers after the harvest of the 2025 crop, which is now in its final stages in Brazil. The reported decline in consumer coffee prices in Brazil for the month of July follows volatility in international markets, driven by issues such as the decision by U.S. President Donald Trump to impose a 50% tariff on Brazilian goods. While products such as orange juice were exempt from the measures, others including coffee, eggs and beef were not. Last week, coffee futures in New York rose 8% as investors grew concerned that the tariffs could hinder trade between the world's largest coffee consumer, the United States, and the globe's biggest producer and exporter, Brazil. It is too early to tell if Trump's decision to hike tariffs against Brazilian goods could lead to lower prices of staples including coffee, IBGE manager Fernando Goncalves told Reuters. "It could be an effect of increased supply, and it's not possible to say or confirm that it's related to the tariff hike. The tariff hike only began this month," he said. https://www.reuters.com/world/americas/brazil-consumer-coffee-prices-fall-july-first-time-18-months-2025-08-12/

2025-08-12 13:23

SAO PAULO, Aug 12 (Reuters) - Brazil's inflation undershot market expectations in July, data from statistics agency IBGE showed on Tuesday, with a monthly drop in food prices providing some relief even as the annual rate remained well above the central bank's target. Consumer prices in Latin America's largest economy rose 0.26% in July, the agency said, ticking up from 0.24% in the prior month but below the 0.37% increase forecast by economists polled by Reuters. Sign up here. Prices were up 5.23% in the 12 months through July, IBGE added, down from 5.35% in the previous month. Market participants had expected the annual rate to come in at 5.33%. Brazil's central bank in July interrupted an aggressive tightening cycle that had added 450 basis points to its benchmark interest rate, bringing it to nearly a 20-year high of 15%, in a bid to tame persistent inflation. Policymakers at the central bank have vowed to bring inflation back to the official 3% target, forecasting borrowing costs to remain at a "very restrictive" level into next year. The official goal has a tolerance band of plus or minus 1.5 percentage points, but the upper end of that range has now been exceeded for 10 consecutive months. Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, said the July figures indicate that restrictive monetary policy is starting to deliver results. "Headline pressures are easing gradually," he noted. The monthly price rise was driven by higher housing costs as electricity prices surged, IBGE said. On the other hand, closely watched food and beverage prices fell for the second month in a row. Apparel and communication costs were also down. https://www.reuters.com/world/americas/brazils-inflation-undershoots-forecasts-july-amid-high-interest-rates-2025-08-12/

2025-08-12 13:09

NEW YORK, Aug 12 (Reuters) - U.S. consumer prices increased moderately in July, largely in line with expectations, though rising costs for goods because of import tariffs led to a measure of underlying inflation posting its largest gain in six months. The consumer price index rose 0.2% last month after gaining 0.3% in June, data showed. In the 12 months through July, the CPI advanced 2.7% after rising 2.7% in June. Economists polled by Reuters had forecast the CPI rising 0.2% and increasing 2.8% year-on-year. Sign up here. Excluding the volatile food and energy components, the CPI rose 0.3%, the biggest gain since January, after climbing 0.2% in June. The so-called core CPI increased 3.1% year-on-year in July after advancing 2.9% in June. MARKET REACTION: STOCKS: U.S. stock index futures rose after the CPI data. The S&P 500 E-minis were slightly up on the day. BONDS: The yield on benchmark U.S. 10-year notes was flat at 4.277% FOREX: The dollar index slipped 0.1% to 98.406, while the euro rose 0.1% to $1.1622. COMMENTS: TOM PORCELLI, CHIEF US ECONOMIST, PGIM, NEW JERSEY: "This is one of these better-than-feared outcomes. People are probably going to use this as a sign that the Fed could cut rates in September. And I don't doubt for a second that that's exactly how the market is going to react. The only thing I would caution, though is, it's going to take time for these tariffs to really show up in earnest." "I think people that anyone waiting for this to show up in sort of one big move higher in any given month, that's not how it's going to be. It's going to sort of trickle in. The real peak inflation is not today. Peak inflation on the back of tariffs is actually months from now. And inventories in particular have really allowed companies to sort of mitigate some of the initial tariff thrust. So yes, we believe that the Fed is supposed to cut in September. It's been our long-standing call." ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK: "Inflation is moving closer to the Fed's target of 2% and that is a bullish thing because the lower inflation gets, the greater the chances are the Fed will cut rates. If you look at the data, the jobs report was weaker than expected and inflation was weaker than expected. That increases the odds the Fed will cut rates.' "The economy is in a good place because inflation's coming down and that's exactly what both Trump and the Fed want...By the end of the year, I'd expect 50 basis points cut. If they cut more, that means the data would have to continue to weaken. If we get more weaker than expected jobs reports, then the Fed's going to cut more aggressively. But if the economy stays as is and inflation continues to come down, then that'll open the door for the Fed to cut." GUY LEBAS, CHIEF FIXED INCOME STRATEGIST, JANNEY MONTGOMERY SCOTT, PHILADELPHIA: "The July CPI was roughly in line with expectations and did not include very much tariff pass-through to consumer prices and is certainly good enough to lock in the odds of a September rate cut. There's more road between here and the 17th of next month, but at least as far as inflation data goes, this is pretty unconcerning." "One thing that's notable is that the categories within the CPI that would normally be associated with tariffs were by and large pretty tame. So new vehicles, and we've heard a lot about how cross-border flows of vehicle parts are increasing prices there, they were unchanged month over month. Apparel, a huge portion of which is imported to the U.S., was up only a tenth month over month. And recreational goods, your baseball bats and other similar objects, also heavily imported, they were a little bit a little bit heavier, up four tenths, but still not very concerning. And you can go into some more detailed categories that show a similar picture." "You can read this in one of two ways as an independent, unbiased economist type, which is that inflation will increase in the future because the tariffs haven't hit yet. Or you can read it as firms are eating the tariffs, so it's not going to hit consumer inflation. But I think either way is enough cover for the Fed for a September rate cut, assuming we don't get a big acceleration from next month's data." SEEMA SHAH, CHIEF GLOBAL STRATEGIST, PRINCIPAL ASSET MANAGEMENT, LONDON: "Although core annual inflation is back to its highest level since February, today’s CPI print is not hot enough to derail the Fed from cutting rates in September. There is some sign of tariff pass through to consumer prices but, at this stage, it is not significant enough to ring alarm bells." "The concern for the Fed is that with inventory run-down, the tariff-induced boost to inflation is likely to grow over the coming months, meaning that inflationary pressures are likely to pick up just as the Fed starts to resume rate cuts. Markets like today"s inflation print as it means the Fed can lower rates unheeded next month – rate cut decisions in October, December and beyond may well be more complicated." KARL SCHAMOTTA, CHIEF MARKET STRATEGIST, CORPAY, TORONTO" "Underlying inflation remains subdued, giving policymakers room for maneuver as they respond to signs of incipient weakness in labor markets. Chair Powell should put a September cut on the table when he speaks at Jackson Hole on the 21st." "But the American economy's turn toward isolationism and autarky is still underway, and price pressures might begin to build in the coming months as tariffs hit tradeable goods and immigration controls begin pushing services costs higher. The prevailing market narrative could shift directions several times over the coming months." ALEXANDRA WILSON-ELIZONDO, GLOBAL CO-CIO OF MULTI-ASSET SOLUTIONS, GOLDMAN SACHS ASSET MANAGEMENT, NEW YORK: (VIA EMAIL) "July's CPI figure came in in-line with expectations, with core inflation at 3.1% year over year. The Fed is getting the data support that the tariff effect on price level will mostly be transitory. Tariffs have yet to drive substantial price increases, as companies continue to offset cost pressures by drawing down inventories and adjusting prices cautiously due to perceived consumer price sensitivity. The Fed's policy stance is highly data-dependent, and with inflation contained and labor market softness increasingly evident in revised payroll data, the emphasis will now be skewed toward employment. In essence, this inflation print supports the narrative of an insurance rate cut in September, which will be a key driving force for the markets." BEN LAIDLER, HEAD OF EQUITY STRATEGY, BRADESCO BBI, LONDON: "The market is taking a lot of comfort from the headline number, which came in a little bit lower than expected. On the face of it, it's validating this overwhelming consensus for a Fed rate cut in September, however we:re a bit cautious on that." "When you look at the core number, it's maybe not as much as a slam dunk as the market may think. We don't think this report is quite as good as the market maybe initially taking it out. We're going to get a lot more information at the Jackson Hole Symposium where we're going to get some guidance from Powell as to what's going to happen in September." "The market is going to continue to overwhelmingly price this September cut. The odds are not quite as firmly stacked as the market would think. When you scratch the surface, the core inflation number, which the feds focus is not as good a reading as the headline number. That said, the Fed is going to come under an awful lot of pressure to give some guidance at Jackson Hole and the market will be very disappointed if you don't get a September cut." JUAN PEREZ, DIRECTOR OF TRADING, MONEX USA, WASHINGTON: "Thus far it looks like the U.S. dollar is down as a result of CPI coming in basically just as expected. Markets seem eager to price in more than just one interest rate reduction for the year, but these numbers suggest inflation remains growing though at a slow pace." BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, BROOKFIELD, WISCONSIN: (VIA EMAIL) "The core message in core inflation is that any tariff-induced inflation is likely to be a process, not an event. Eventually, tariffs can show up in varying degrees in consumer prices, but these one-off price increases don’t happen all at once. That will confound the Fed and economic commentators for months to come. As long as breakeven inflation rates and other market based measures of inflation expectations stay contained, the Fed should feel comfortable enough to recommence cutting in September." https://www.reuters.com/business/view-us-inflation-rises-july-line-with-expectations-2025-08-12/